Computer Firms Get Political

The computer industry, once a small player on the Washington political scene, is greatly increasing its contributions to political candidates as the number of issues it faces on Capitol Hill grows, according to a report on industry contributions released Monday.

In the 1995-96 election cycle, the computer industry gave $7.3 million to political action committees, to the major political parties and to federal candidates and parties, according to a study by the Center for Responsive Politics, a nonpartisan group that analyzes campaign spending and the influence of money in politics. Computer industry donations in the 1995-96 cycle were 52% higher than in the previous presidential election cycle, in 1991-92.

“While computer companies have traditionally never been major Washington players, they are increasing their political presence,” the report says. They have ample reason to get involved because the industry is growing, and “there are almost a dozen bills in the House and Senate that could affect the industry’s bottom line.”

In addition to its campaign contributions, the industry spent $19.9 million on lobbying expenses in 1996, the study found. International Business Machines Corp. spent the most on lobbying, $4.9 million, followed by Texas Instruments Inc., $3.6 million; Electronic Data Systems Corp., $1.8 million; Microsoft Corp., $1.1 million; and Netscape Communications Corp., $960,000.

“IBM does not contribute to any campaigns,” but it does spend money on lobbying, said Fred McNeese, an IBM spokesman. That’s because the company has a number of important issues on its plate in Washington, McNeese said. “We wanted our voice heard.”

Randolph Dove, a spokesman for EDS, said the company has “many strategic business units” and has lobbyists working in all those different issue areas. Among the industries EDS keeps tabs on are transportation, banking, energy, insurance, manufacturing, the Internet and pharmaceuticals, Dove said.

One of the most contentious issues before Congress this year is export controls on computer encryption codes. The Clinton administration, citing national security concerns, wants the industry to provide access to a decoding device to its encrypted software. The computer industry says foreign governments don’t impose similar restrictions on their computer products, putting U.S. companies at a competitive disadvantage. Several bills are moving through Congress that would relax the export controls.

Another controversial issue is the World Intellectual Property Organization treaty on copyright protection on the Internet. Legislation that would carry out this agreement includes a provision that forbids the manufacture of most devices designed to circumvent encryption technology. Computer hardware companies say they’re concerned that this provision is too strong because some products that have other legal uses could be used to bypass encryption technology.

The industry is also backing legislation that would prohibit taxes on Internet commerce. It says taxation would stifle development of new technologies.

A report issued last week by Citizen Action said computer companies already won a victory in the tax bill passed last month. The bill includes a provision that exempts the industry from paying taxes on income it earns from licensing software for overseas production or distribution.

Microsoft was the top software campaign donor, with $300,000 in contributions for the last 2 1/2 years. About a third of Microsoft’s sales come from overseas, the group said.

Top House recipients of the computer industry’s money in the 1995-96 election cycle were Tom Campbell (R-San Jose), Thomas M. Davis (R-Va.), Rick White (R-Wash.), Joseph P. Kennedy II (D-Mass.) and Anna G. Eshoo (D-Atherton).

Top Senate recipients were Texas Republicans Kay Bailey Hutchison and Phil Gramm, John W. Warner (R-Va.) and Massachusetts Democrats Edward M. Kennedy and John F. Kerry.